Mwangi v Industrial and Commercial Development Corporation (Employment and Labour Relations Cause 2098 of 2016) [2023] KEELRC 2738 (KLR)
The bottom line
#Kenya's Employment Court ruled a state employer unfairly fired its ICT Manager for poor performance without following its own warning and improvement policy, awarding compensation and protecting his loan terms.
What this practically means
#Executive summary
#Key legal issues
#Procedural fairness of the termination
The termination was procedurally fair: the Claimant was notified of the grounds, issued a show cause letter, allowed time to prepare, given a hearing and a right of appeal
The court traced the sequence of the show cause letter dated 19 October 2015, the Claimant's response, the invitation to the Staff and General Purposes Committee hearing on 17 February 2016 later rescheduled to 23 February 2016 at the Claimant's request, his written defence, and his appeal. This satisfied the notification, hearing and consideration components of section 41 of the Employment Act.
Substantive justification for termination on grounds of poor performance
The termination was substantively unjustified: the Claimant was rated below 'Good' in only two appraisal periods, the employer failed to follow its own policy on warnings and performance improvement programmes, relied on an invalid mock appraisal and a delayed confirmation, and did not prove the underperformance was not caused by factors outside the Claimant's control
The appraisal record showed ratings of 'very good', 'good' and 'good' for three years, 'poor' in 2012/2013 and 'fair' in 2014/2015. The Respondent's policy required placement on a six-month performance improvement programme and warning letters before termination; the Respondent skipped these steps. RW1's claim of training support lacked documentary proof. Tracing unsatisfactory performance back to 2006 was unreasonable.
Entitlement to remedies
Reinstatement refused under the three-year bar; injunctions on the staff loan interest rate and against the sale of the charged property granted; loan to be repaid at 3%; compensation of eight months' gross salary awarded; general, aggravated and exemplary damages and constitutional declarations refused
Reinstatement was barred by section 12(3)(vii) of the ELRC Act given almost seven years had passed. Having found the termination unfair, the court applied equity principles to preserve the 3% staff interest rate and restrain sale of the security. Compensation under section 49(1)(c) was fixed at eight months considering the length of service and the Respondent's breach of its policy. Double recovery, punitive damages and unpleaded constitutional violations were declined.
Legal principles established
#- Fairness in termination comprises both substantive justification and procedural fairness, and absence of either renders termination unfair
- In termination for poor performance, the employer bears a high burden to prove known performance standards, evaluation measures, support to improve, and that the failure was within the employee's control
- An employer must follow its own policy framework (warnings and performance improvement programme) before terminating for poor performance
- The court will not allow an employer who unfairly terminated employment to benefit from its wrong by reverting staff loan interest to commercial rates
Court orders
#- 1.A declaration that the Claimant's termination was procedurally fair but substantively unjustified and unfair
- 2.A permanent injunction restraining the Respondent from converting the interest rate on the credit facilities advanced to the Claimant from the special staff rate of 3% to commercial rate
- 3.A permanent restraining order against the Respondent from alienating, selling, transferring or attempting to sell by auction the Claimant's property known as LR. No. 12948/230 Nairobi Area, on account of any default in loan repayment from the date of termination to the date of judgment
- 4.The Claimant shall continue repaying the loan at 3% and the contractual monthly instalments
- 5.Compensation pursuant to section 49(1)(c) of the Employment Act, 2007 of Kshs. 3,035,805.60 (eight months' gross salary)
- 6.Costs of the suit to the Claimant
- 7.Interest on the sum awarded at court rates from the date of judgment until full payment
- Jurisdiction invoked
- Employment and Labour Relations Court Act, section 12; Employment Act 2007
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Mwangi v Industrial and Commercial Development Corporation (Employment and Labour Relations Cause 2098 of 2016) [2023] KEELRC 2738 (KLR)", Case Analysis (2023). Memorandum of Claim dated 7th October 2016. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/2738/eng@2023-10-17
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.